REPORT DIGEST

 

REGIONAL OFFICE OF EDUCATION #20:

EDWARDS, HARDIN, GALLATIN, POPE, SALINE, WABASH, WAYNE AND

WHITE COUNTIES

 

Financial Audit

For the Year Ended June 30, 2010

 

Summary of Findings:

Total this audit:  2

Total last audit:  2

Repeated from last audit:  0

 

Release Date: March 22, 2011

 

State of Illinois, Office of the Auditor General

WILLIAM G. HOLLAND, AUDITOR GENERAL

 

To obtain a copy of the Report contact:

Office of the Auditor General, Iles Park Plaza, 740 E. Ash Street, Springfield, IL 62703

(217)    782-6046 or TTY (888) 261-2887

 

This Report Digest and Full Report are also available on the worldwide web at www.auditor.illinois.gov

­­­­­­­­­­­____________________________

 

SYNOPSIS

 

• The Regional Office of Education #20 did not have sufficient internal controls over payroll.

 

• The Regional Office of Education #20 did not have sufficient internal controls over compliance with laws and regulations.

 

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

 

INTERNAL CONTROL OVER PAYROLL

 

The Regional Office of Education #20 did not have sufficient internal controls over payroll.  The Regional Superintendent of Schools is responsible for establishing and maintaining an internal control system over the payroll process to prevent errors and fraud.

 

During testing of internal controls, auditors noted gross salary for 3 out of 40 employees had increased without documented authorization of the Regional Superintendent.  Unauthorized changes in payroll rates could result in employees receiving incorrect payment for their services.  (Finding 10-1, page 12a)

 

Auditors recommended that as part of its internal control over payroll, the Regional Superintendent should authorize all changes in salary.  This can be accomplished with a new contract or a pay increase authorization signed by the Regional Superintendent.

 

The Regional Office of Education #20 responded that management will prepare and sign a document indicating any and all changes in salary.

 

CONTROLS OVER COMPLIANCE WITH LAWS AND REGULATIONS

 

The Regional Office of Education #20 did not have sufficient internal controls over compliance with laws and regulations.  The statutory requirements of 105 ILCS 5/17-19 for establishing a line of credit by Regional Superintendents requires the following:

• The Regional Superintendent must approve the borrowing by Executive Order prior to obtaining any financing;

• The Regional Office of Education must obtain a letter from the Illinois State Board of Education documenting the amount of funding that is due to the Regional Office of Education; and

• Any loans taken out must be repaid within 60 days of receiving the funding from the Illinois State Board of Education.

 

The Regional Office of Education #20 obtained a line of credit on November 17, 2009 and on May 17, 2010.  The Regional Office of Education did not prepare an executive order to approve the borrowing nor had the Regional Office received a letter from the Illinois State Board of Education documenting the amount the State owed the Regional Office for the line of credit obtained on May 17, 2010.  In addition, the amounts borrowed on the lines of credit were not repaid within 60 days of receiving funding from the Illinois State Board of Education.  (Finding 10-2, page 12b)

 

The auditors recommended the Regional Office of Education #20 implement a policy for ensuring the Regional Office complies fully with all new regulations and mandates.

 

The Regional Office of Education #20 responded that it will (1) prepare an Executive Order prior to obtaining any financing, (2) be certain to obtain a letter from the Illinois State Board of Education documenting the amount of funding that is due to the Regional Office of Education, and (3) repay loans within 60 days of receiving the funding from the Illinois State Board of Education.

 

AUDITORS’ OPINION

 

Our auditors state the Regional Office of Education #20’s financial statements as of June 30, 2010 are fairly presented in all material respects.

 

WILLIAM G. HOLLAND

Auditor General

 

WGH:JRB

 

AUDITORS ASSIGNED:  Kemper CPA Group, LLC were our special assistant auditors.